Sponsors More Satisfied with Providers than Advisers

According to an Anova Consulting Group survey, small-market retirement plan sponsors report that defined contribution providers (or recordkeepers) are delivering a
higher level of client service than retirement plan advisers.

The research found that overall, plan
sponsors with less than $5 million in plan assets are generally highly
satisfied with their service contacts at the provider/recordkeeper, but
only somewhat satisfied with their retirement plan advisers. More than 1,000 plan sponsors in the adviser-sold space responded to the survey;
88% said they are “very satisfied” with their provider’s service
contact/relationship manager, compared to 77% who are “very
satisfied” with their retirement plan adviser.

“As the DC industry has matured and consolidated, successful
providers have increased their focus on plan sponsor service in order to
boost client retention” said Richard Schroder, President of Anova
Consulting Group. “Results from the plan sponsor
research we’ve performed over the past decade show a consistent upward
trend in satisfaction scores for providers’ client service levels and
personnel.”

The same research also reveals that retirement plan advisers have not
kept pace with these rising service levels, particularly among smaller
plan sponsors, according to Anova. Differentials in service ratings
are most pronounced for sponsors of plans under $5MM in assets, who tend
to be more dependent on their advisers for plan administration
assistance. Areas of particular concern include frequency of client
contact and taking a proactive (versus reactive) approach to the
relationship (83% of plan sponsors are very satisfied with the level and
method of contact with their providers vs. 74% for financial advisers).
For larger plans between $5-$25MM in assets, advisers are more
attentive to plan sponsors, with the gap between recordkeeper and
adviser service levels narrowing considerably and even reversing in some
cases.

“In an increasingly competitive marketplace, customer
satisfaction will continue to be a key differentiator among advisers in
building and maintaining successful practices,” suggests Schroder. “This
study reinforces the necessity for retirement plan advisers to place
further emphasis on the quality of their relationships with clients.
Similar to what has occurred at the provider level, it will become ever
more important for advisers to demonstrate a high level of service to
their clients in order to differentiate themselves from their
competition and build loyalty, especially as fees and the overall value
provided by financial advisers continue to come under increased
scrutiny.”